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The Underperformance of Young Closed-End Funds in Greece

Author

Listed:
  • Dimitrios V Kousenidis

    (Aristotle University of Thessaloniki, Greece)

  • Christos Negakis

    (University of Macedonia, Greece)

Abstract

In the present paper we study the performance of young closed-end funds (CEFs) in Greece. Using monthly CEF data from 1997 to 2007, we provide evidence showing that young funds underperform both old funds and the market. As in Kaplan and Schoar (2005), we note that new underperforming funds occur more frequently during hot market periods, potentially due to the presence of uninformed investors. The entrance of the newly raised funds in the market dilutes the overall industry performance and motivates financial institutions to take over fairly-performing subsidiary funds. As a result, well-performing funds are gradually delisted from the market and eventually only poor-performing funds survive. In this context the takeover activities prevail as a rational explanation for the underperformance and the shrinking of the closed-end fund industry in Greece

Suggested Citation

  • Dimitrios V Kousenidis & Christos Negakis, 2013. "The Underperformance of Young Closed-End Funds in Greece," Multinational Finance Journal, Multinational Finance Journal, vol. 17(1-2), pages 107-148, March - J.
    • Handle: RePEc:mfj:journl:v:17:y:2013:i:1-2:p:107-148
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    References listed on IDEAS

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    Cited by:

    1. Nikolaos Philippas, 2014. "Did Behavioral Mutual Funds Exploit Market Inefficiencies During or After the Financial Crisis?," Multinational Finance Journal, Multinational Finance Journal, vol. 18(1-2), pages 85-138, March - J.
    2. Kosmidou, Kyriaki V. & Kousenidis, Dimitrios V. & Negakis, Christos I., 2015. "The impact of the EU/ECB/IMF bailout programs on the financial and real sectors of the ASE during the Greek sovereign crisis," Journal of Banking & Finance, Elsevier, vol. 50(C), pages 440-454.
    3. Dimitrios, Kousenidis & Eirini, Lazaridou & Trifon, Papapanagiotou, 2019. "The asymmetric performance of industry concentrated funds," The Journal of Economic Asymmetries, Elsevier, vol. 20(C).

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    More about this item

    Keywords

    Closed-end funds; young fund underperformance; models of portfolio performance; ATHEX;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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